Payment system and methods

ABSTRACT

Disclosed are payment system and methods in which a shopper pays with a temporary payment token that is a number (such as a 7-digit number that appeared on the screen of the shopper&#39;s mobile phone) at a POS device, without the shopper needing have his own mag-stripe card.

FIELD OF THE INVENTION

This invention relates generally to payment systems and methods and, more particularly, to payment systems and methods deployed in a retail environment.

BACKGROUND OF THE INVENTION

Some examples of payment systems involving a mobile phone are as follows:

US Pat. App. 2007/0233615 by Tumminaro, published Oct. 4, 2007, for “Member-supported mobile payment system”;

US Pat. App. 2008/0011825 by Giordano et al., published Jan. 17, 2008, for “Transactions using handheld electronic devices based on unobtrusive provisioning of the devices”;

US Pat. App. 2008/0040265 by Rackley III et al., published Feb. 14, 2008, for “Methods and systems for making a payment via a stored value card in a mobile environment”;

US Pat. App. 2010/0042538 by Dheer et al., published Feb. 18, 2010, for “Money movement network method”;

U.S. Pat. No. 7,689,508 issued Mar. 30, 2010 to Davis et al., for “Mobile device credit account”;

U.S. Pat. No. 7,774,123 issued Aug. 10, 2010 to Pond et al., for “Electronic payment methods for a mobile device”;

U.S. Pat. No. 7,784,684 issued Aug. 31, 2010 to Labrou et al., for “Wireless computer wallet for physical point of sale (POS) transactions”;

U.S. Pat. No. 7,822,688 issued Oct. 26, 2010 to Labrou et al., for “Wireless wallet”; 65rtrt U.S. Pat. No. 7,8848,980 issued to Carlson on Dec. 7, 2010, for “Mobile payment system and method using alias”;

US Pat. App. 2010/0312703 by Kulpati et al., published Dec. 9, 2010, for “System and method for providing authentication for card not present transactions using mobile device”;

US Pat. App. 2011/0078081 by Pirzadeh et al., published Mar. 31, 2011, for “Mobile payment application architecture”;

US Pat. App. 2011/0093351 by Afana, published Apr. 21, 2011, for “Mobile payment station system and method”;

U.S. Pat. No. 7,933,799 issued Apr. 26, 2011 to Aaltonen et al., for “Method and system for payment and/or issuance of credits via a mobile device”.

Outside the U.S., a certain M-PESA system is another example. In the U.S., recently Google has been announcing an upcoming Google Wallet payment system.

SUMMARY OF THE INVENTION

The present inventors have recognized that what has not been addressed, before their invention, is the need for an ability for a merchant to be a direct issuer of a card-not-present debit card via a mobile device through the Federal Reserve ACH system (or the Electronic Payments Network (EPN) system) whereby the merchant does not hold the cardholder's savings or checking account and thus “decouples” the card from the traditional bank/depository institution, especially by which a shopper can use his mobile phone in combination with his existing checking account to pay a retailer at a retail site.

According to an aspect of the present invention, there is a method for a system having a plurality of persons; a plurality of cards issued under authority of an entity; a retail site configured with a first signal, the first signal being common to the plurality of cards; a routing system for receiving a signal and generating a network address in response to the received signal, the routing system including a plurality of wide area communication links, the routing system being configured using the first signal, the system further including a second signal on a first card in the plurality of cards; and a second system storing an association between the second signal and account information, the entity and an owner of the second system not being affiliated, the entity not being affiliated with a retailer. The method comprises the steps, performed at the retail site, of: receiving the first and second signals from the first card; sending the first and second signals into the routing system, to cause the second system to perform the steps of determining whether the first card can effect payment, responsive to the determining step, conditionally sending a message to cause an institution to send an ACH entry to an Automated Clearing House System (such as the Federal Reserve ACH system or the Electronic Payments Network (EPN) system), to pass the entry to a bank, where an account is issued a debit, to cause a transfer of funds to the owner of the retail site, and making an entry in an accounting system, to effectively increment an amount owed by the owner of the retail site to the owner of the second system. The method further includes the step, performed at the retail site, of conditionally effecting a transaction with a holder of the first card, depending on a signal received from the second system.

According to another aspect of the present invention, there is a transaction system for operating with a system having a plurality of persons; a plurality of cards issued under authority of an entity; a retail site configured with a first signal, the first signal being common to the plurality of cards; a routing system for receiving a signal and generating a network address in response to the received signal, the routing system including a plurality of wide area communication links, the routing system being configured using the first signal, the system further including a second signal on a first card in the plurality of cards; and a second system storing an association between the second signal and account information, the entity and an owner of the second system not being affiliated, the entity not being affiliated with a retailer. The transaction system comprises means for receiving the first and second signals from the first card; means for sending the first and second signals into the routing system, to cause the second system to perform the steps of determining whether the first card can effect payment, responsive to the determining step, conditionally sending a message to cause an institution to send an ACH entry to an Automated Clearing House System (such as the Federal Reserve ACH system or the Electronic Payments Network (EPN) system), to pass the entry to a bank, where an account is issued a debit, to cause a transfer of funds to the owner of the retail site, and making an entry in an accounting system, to effectively increment an amount owed by the owner of the retail site to the owner of the second system; and means for conditionally effecting a transaction with a holder of the first card, depending on a signal received from the second system.

According to yet another aspect of the present invention, there is a method for a system having a plurality of persons; a plurality of vehicles; a plurality of cards issued under authority of a government, each card evidencing a license for a person to operate a vehicle; a retail site configured with a first signal, the first signal including a license card IIN number, the first signal being common to the plurality of cards; a routing system for receiving a signal and generating a network address in response to the received signal, the routing system including a plurality of wide area communication links, the routing system being configured using the first signal, the system further including a second signal, the second signal including a personal ID number, on a first card in the plurality of cards; and a server storing an association between the second signal and account information. The method comprises the steps, performed at the retail site, of: receiving the first and second signals from the first card; sending the first and second signals into the routing system, to cause the server to perform the steps of determining whether the first card can effect payment, responsive to the determining step, conditionally sending a message to cause an institution to send an ACH entry to an Automated Clearing House System (such as the Federal Reserve ACH system or the Electronic Payments Network (EPN) system), to pass the entry to a bank, where an account is issued a debit, to cause a transfer of funds to the owner of the retail site, and making an entry in an accounting system, to effectively increment an amount owed by the owner of the retail site to the owner of the server. The method further includes the step, performed at the retail site, of conditionally effecting a transaction with a holder of the first card, depending on a signal received from the server.

In another preferred embodiment, the invention provides a method for a system having a plurality of persons; a plurality of payment tokens issued under authority of an entity (such as, e.g., Apple; AT&T; etc.); a retail site configured with a first signal, the first signal being common to the plurality of payment tokens; a routing system for receiving a signal and generating a network address in response to the received signal, the routing system including a plurality of wide area communication links, the routing system being configured using the first signal, the system further including a second signal on a first payment token in the plurality of payment tokens; and a second system storing an association between the second signal and account information, the entity and an owner of the second system not being affiliated, the entity not being affiliated with a retailer, method comprising the steps, performed at the retail site, of: receiving the first and second signals from the first payment token; sending the first and second signals into the routing system, to cause the second system to perform the steps of determining whether the first payment token can effect payment; responsive to the determining step, conditionally sending a message to cause an institution to send an ACH entry to an Automated Clearing House System (such as the Federal Reserve ACH system or the Electronic Payments Network (EPN) system), to pass the entry to a bank, where an account is issued a debit, to cause a transfer of funds to the owner of the retail site, and making an entry in an accounting system, to effectively increment an amount owed by the owner of the retail site to the owner of the second system; wherein the method further includes the step, performed at the retail site, of: conditionally effecting a transaction with a holder of the first payment token, depending on a signal received from the second system.

The invention in another preferred embodiment provides a method for a system having a plurality of persons; a plurality of payment tokens (such as, e.g., a plurality of payment tokens issued under authority of an entity (such as, e.g., an entity which is not affiliated with a retailer; an entity which is Apple; an entity which is AT&T; etc.); a plurality of payment tokens that comprises a plurality of cellular devices; a plurality of payment tokens that comprise a plurality of wireless devices; etc.); a retail site configured with a first signal, the first signal being common to the plurality of payment tokens; a routing system for receiving a signal and generating a network address in response to the received signal, the routing system including a plurality of wide area communication links, the routing system being configured using the first signal, the system further including a second signal on a first payment token in the plurality of payment tokens; and a second system storing an association between the second signal and account information, method comprising the steps, performed at the retail site, of: receiving the first and second signals from the first payment token; sending the first and second signals into the routing system, to cause the second system to perform the steps of determining whether the first payment token can effect payment; responsive to the determining step, conditionally sending a message to cause an institution to send an ACH entry to an Automated Clearing House System (such as the Federal Reserve ACH system or the Electronic Payments Network (EPN) system), to pass the entry to a bank, where an account is issued a debit, to cause a transfer of funds to the owner of the retail site, and making an entry in an accounting system, to effectively increment an amount owed by the owner of the retail site to the owner of the second system; wherein the method further includes the step, performed at the retail site, of: conditionally effecting a transaction with a holder of the first payment token, depending on a signal received from the second system.

The invention in another preferred embodiment provides a decoupled debit payment method for a holder of a United States checking account with a financial institution to accomplish a purchase at a retail site, wherein the checking account holder has physical possession of a payment token, the payment token not being a card with a magnetic stripe or bar code, comprising steps, performed at the retail site, of: receiving a first signal and a second signal from the payment token; sending the first signal and the second signal into a routing system; depending on a signal received from a second system in which is stored an association between the second signal and account information, conditionally effecting a transaction with the holder of the payment token; whereby the holder of the payment token has accomplished the purchase at the retail site; wherein the steps are performed by a computer or computers within an automated system.

BRIEF DESCRIPTION OF THE DRAWINGS

References are made to the following text taken in connection with the accompanying drawings, in which:

FIG. 1 shows a retail system according to a first exemplary embodiment of the present invention.

FIGS. 2A and 2B show another aspect of the first exemplary system.

FIGS. 3A and 3B show a driver's license card, which is an example of a payment token, in the first exemplary system.

FIGS. 4A, 4B, and 4C are a flowchart of a process performed in the first exemplary system.

FIG. 5 shows another aspect of the exemplary system.

FIGS. 6A, 6B, and 6C show a retail grocery store in the first exemplary system.

FIG. 7 is a diagram showing transaction flows in the first exemplary system.

FIG. 8 shows another retail site in the first exemplary system.

FIG. 9 is a representation of a table in a database in the first exemplary system.

FIG. 10 is a diagram showing transaction flows in the second exemplary system.

FIG. 11 shows a system according to a fourth exemplary embodiment.

FIG. 12 shows another data structure in an exemplary system.

FIG. 13 shows another data structure in an exemplary system.

FIG. 14 shows another data structure in an exemplary system.

FIG. 15 shows a system according to a fifth exemplary embodiment.

FIG. 16 shows another data structure in an exemplary system.

FIG. 17 shows a retail system according to an exemplary embodiment of the present invention.

FIG. 18 is a diagram depicting certain components of a payment system according to an exemplary embodiment of the invention in which shoppers each have a mobile device without having their own mag-stripe card.

FIGS. 19-22 are screen shots from a mobile device of a shopper in an exemplary embodiment of the invention in which a POS device at a retail site is used.

The accompanying drawings which are incorporated in and which constitute a part of this specification, illustrate embodiments of the invention and, together with the description, explain the principles of the invention, and additional advantages thereof. Certain drawings are not necessarily to scale, and certain features may be shown larger than relative actual size to facilitate a more clear description of those features. Throughout the drawings, corresponding elements are labeled with corresponding reference numbers.

DETAILED DESCRIPTION OF PREFERRED EMBODIMENTS

In the present invention, payment token (such as payment token 1700 in FIG. 17 which shows exemplary system 17 according to a preferred embodiment of the present invention) in possession of an owner (such as shopper 1701 in FIG. 17) of a checking account at a financial institution which is a Federal Reserve ACH member and/or an Electronic Payments Network (EPN) member is useable by him to accomplish a purchase transaction at a retail site, without the payment token needing to be a debit or credit card issued by the financial institution. Thus, the invention provides a decoupled debit payment method.

When we refer herein to “decoupled debit” payment method, such as a payment method for a holder of a United States checking account with a financial institution, we mean that the checking account holder is able to accomplish payment using his checking account but without needing to use a card issued by his financial institution (such as a debit card issued by his financial institution).

The Federal Reserve Automated Clearing House, typically in the US financial industry called “ACH”, is an existing Federal Reserve clearing house through which, for example, a check written on an account at a member financial institution is cleared.

More recently, a group of about fifteen of the largest US banks created the Electronic Payments Network (EPN) system which operates much like the Federal Reserve ACH system. Currently, of transactions which are clearable via an Automated Clearing House System, about ⅔ of the transactions are cleared via the Federal Reserve ACH and about ⅓ of the transactions are cleared via EPN.

Examples of a shopper-side payment token useable in the invention include, e.g., a driver's license card or other physical card, an electronic token, a token stored in a mobile payment device, a cellular device, a smart phone, a wireless device, a handheld electronic device; a personal digital assistant; a number (such as, e.g., a 7-digit number) or other set of characters to be entered by a shopper into a POS device; etc. Preferably the shopper-side payment token is not a card with a magnetic stripe or bar code conventionally used to conduct a debit or credit card transaction by a financial institution or third party processor for financial settlement of funds due a retailer. Most preferably, the shopper-side payment token is not a magnetic striped card or bar coded card.

By “a retail site”, we mean a physical geographic premises at which customers are received to do business.

By a shopper's “physical possession” of a shopper-side payment token, we mean that the payment token is on, with, or in the general immediate vicinity of the shopper, as opposed to being left at home while the shopper is at the retail site. The shopper-side payment token is not always required to be in physical contact with the shopper.

In the figures and hereinbelow, “ACH” should be understood as referring to an Automated Clearing House such as Federal Reserve ACH and Electronic Payments Network (EPN); and, without limitation, any comparable automated clearing house not yet launched but which may be built.

In the invention, referring to FIG. 17, advantageously ACH is put to use by shopper 1701 who has a checking account, for shopper 1701 to accomplish mobile decoupled debit payment, that is, shopper 1701 accomplishes payment based on his checking account but otherwise than in conventional ways of writing a paper check, swiping a magnetic-striped debit card, or using a bar-coded card which previously shopper 1701 would have needed to carry with him in order to use his checking account to make a purchase at a retail site. Shopper-side payment token 1700 is used or presented by shopper 1701 to put into motion electronic processes by which communication with ACH is accomplished. Most preferably, shopper-side payment token 1700 is such that shopper 1701 is not required to carry another physical item in addition to what he already carries by necessity and choice. In an example of a shopper 1701 who is a licensed driver, he would already be carrying a driver's license in his wallet as a matter of course and a shopper-side payment token 1700 that is his driver's license does not add an additional physical item for him to carry. As another example, in a case of a shopper 1701 who carries a mobile phone, a shopper-side payment token 1700 that is the mobile phone, or a part thereof, or a number (such as a 7-digit number) that appears on a screen thereof, does not add an additional physical item for shopper 1701 to carry.

In system 17, automated system 1705 (such as, e.g., system 5 in FIG. 1) is in communication with ACH and is able to receive communications routed via routing system 1712 (such as, e.g., routing system 120 in FIG. 1) from retailers (such as retailer 6 and retailer 11 in FIG. 1) An example of system 1705 is, e.g., a privately-owned system. In most embodiments, system 1705 and routing system 1712 are in different geographical places. In most embodiments, system 1705 would be elsewhere than at a retail site or other premises of a retailer. In most embodiments, routing system 1712 would be elsewhere than at a retail site or at a premises of a retailer. Preferably routing system 1712, in addition to receiving and routing communications as appropriate to system 1705 which then communicates with ACH, also receives and routes communications elsewhere as appropriate such as to a credit card system (such as credit card system 4 in FIG. 1) and a debit card system (such as debit card system 7 in FIG. 1). For system 1705, conventional hardware may be used. For routing system 1712, conventional hardware may be used.

For practicing the invention, a retail site (such as stores 55, 56, 57, 58, 59 in FIG. 1) is provided with equipment (not shown in FIG. 17) that communicates with and/or receives therein shopper-side payment token 1700 when shopper 1701 wants to shop using shopper-side payment token 1701. When shopper 1701 uses shopper-side payment token 1700 according to the invention to accomplish a mobile payment making use of ACH, the amount of time needed from when the shopper 1701 uses or otherwise presents shopper-side payment token 1701 until ACH has processed the communications and sent back communications that result in mobile payment having been accomplished is in real-time, such as, e.g., a matter of seconds.

The equipment installed at the retail site is chosen to coordinate with shopper-side payment token 1700. For example, if the retail site intends for a shopper 1701 to be able to use a shopper-side payment token 1700 that is a driver's license, equipment that recognizes and processes a driver's license is installed at the retail site. As another example, if the retail site intends for a shopper 1701 to be able to use a shopper-side payment token 1700 that is a mobile phone or part thereof, equipment that recognizes and processes a signal or signals from a mobile phone, or part thereof, is installed at the retail site. As another example, if the retail site intends for shopper 1701 to be able to use a shopper-side payment token 1700 that is a number (such as a 7-digit number), conventional POS pin-pad-entry hardware already installed at most retail sites is useable.

Where shopper-side payment token 1700 is a tangible object, in order for shopper-side payment token 1700 to be recognized when used at a retail site to make payment using shopper 1701's checking account, shopper 1701 enrolls by completing a one-time, pre-shopping enrollment process, preparatory to his shopping successfully with shopper-side payment token 1700. Through the enrollment process, shopper-side payment token 1700 is thereby entered into the data maintained by the business owning or operating routing system 1712 and/or system 1705.

Where shopper-side payment token 1700 will be a number that appears on a screen of the shopper's own mobile device, shopper 1701 enrolls his/her own mobile device by completing the one-time, pre-shopping enrollment process, preparatory to shopping at the retail site. Preferably a single one-time enrollment of the shopper's own mobile device supports a series of different numbers each of which singly appears on screen of the shopper's own mobile device at a respective time at a different retail site when the shopper takes a different shopping excursion.

How shopper-side payment token 1700 is physically used to initiate the automated steps by which mobile payment is accomplished is not particularly limited, with examples being, e.g., inserting shopper-side payment token 1700 into optical scanner equipment at the retail site; swiping shopper-side payment token 1700 in a vicinity of equipment at the retail site; using shopper-side payment token 1700 to dial a number posted at the retail site; shopper-side payment token 1700 being punched-into a POS device PIN pad by a shopper; etc.

EXAMPLE 1

As one non-limiting example of FIG. 17, FIG. 1 shows exemplary system 1 according to a preferred embodiment of the present invention. System 1 includes multiple persons, such as person 290 and person 470. System 1 also includes a plurality of vehicles, such as automobile 103 owned by person 290 and automobile 104 owned by person 470. Person 290 operates automobile 103 to travel from her home 106 to various locations, such as her place of employment, and store 55 in retailer 6. Person 290 carries a driver's license card 295 evidencing a license to operate a vehicle such as automobile 103. Person 470 operates automobile 104 to travel from her home to various locations, such as store 55 in retailer 6. Person 470 carries a driver's license card 215 evidencing a license to operate a vehicle such as automobile 104.

These licenses and license cards 215 and 295 license were issued under the authority of a government agency, such as the Florida Department of Motor Vehicles (DMV) by Motor Vehicle Department 108, which is a part of the Florida State Government. Occasionally, persons 290 and 470 must display their driver's license cards to state officials, such as policeman 110 to prove they are authorized to operate an automobile.

FIGS. 2A and 2B emphasize other aspects of System 1. System 1 includes system 5, which communicates with retailers 6, 10, and 11, via routing system 120. Services from payment processors—such as First Data, RBSlynk, and Fifth Third—may be configured to implement routing system 120.

System 5, in a location such as Reston, Va., receives signals from the retailers, to validate customer authorization at the time of a retail transaction, and to debit a customer account later. A signal from a retailer to system 5 is represented by a directed line going from the retailer to system 5; and a signal from system 5 to a retailer is represented by a directed line going from system 5 to the retailer.

In response to a signal from system 5, retailer 6, for example, allows a customer transaction to proceed.

System 5 is owned and operated by a private entity that is under the general control of neither the Florida State Government nor the Virginia State Government. Of course the private entity that owns and controls system 5 may have certain statutory, regulatory, contractual, or common law obligations to these state governments, as any persons resident in a state would have.

The owner of system 5 and the owner of retailer 11 are non-affiliated, meaning that they are not affiliates with respect to each other. Is this patent application, concerns are affiliates of each other when one concern controls or has the power to control the other, or a third party or parties controls or has the power to control both. Power to control is described in Section 121 of the U.S. regulations of the Small Business Administration.

The owner of system 5 and the owner of retailer 6 are non-affiliated.

The owner of system 5 and the owner of retailer 10 are non-affiliated.

FIG. 3A shows a front, plan view of card 215 carried by person 470, who is a customer in system 1, and FIG. 3B shows a back, plan view of card 215. In this example, card 215 is a state-issued driver's license including a photograph 217 of person 470, and magnetic stripe 219 storing the ID number and other information on the reverse side. Track 2 of stripe 219 also stores the number 636010, indicating the jurisdiction of Florida, in accordance with International Standard ISO 7812.

FIGS. 4A, 4B, and 4C show a process performed by circuitry in system 1. Step 3 includes configuring routing system 120, in accordance with a network address, or network position, of system 5, so that certain signals will be sent to system 5, as described in more detail below.

Steps 5, 10, and 15 are performed for multiple persons, in a store of a retailer, such as retailers 6, 10, and 11. In order to enroll in the program, the customer enters a card number and bank account number at a web site. Alternately, the customer is processed at the retailer customer service area, where the magnetic stripe 219 of card 215 is scanned (step 5), a personal identification number (PIN) entry is received from the consumer into the terminal (step 10), and a personal check is scanned (step 15). The collection of the card identification number, PIN, the bank routing and account number read from the check, then becomes part of transmitted packet to system 5, in which they are stored in association in a database (step 20). The method and protocol for this transmission is TCP/IP.

FIGS. 6A, 6B, and 6C show a context in which subsequent steps of the flow chart of FIGS. 4A, 4B, and 4C are performed. FIGS. 6A, 6B, and 6C are each a partial view of store 55 in retailer 6. Store 55 has a plurality of product areas, each corresponding to a respective product, and checkout stations 900, 901, and 902. Each checkout station includes a bar code reader that detects an optical (electromagnetic) signal reflected from a bar code, and a magnetic stripe reader that scans a magnetic card. Checkout station 900 includes payment terminal 920 having a card interface slot 914, checkout station 901 includes payment terminal 921 having a card interface slot 914, and checkout station 902 includes payment terminal 922 having a card interface slot 914. Each payment terminal includes a button 919 labeled “CREDIT” and a button 949 labeled “DEBIT”. Each of these buttons is one kind of user interface object.

Upon completion of shopping, each customer brings selected products from the shelves to checkout station 900, 901, or 902.

Each customer presents her customer card. In this example, customer 490 presents credit card 495, which is associated with an installment payment account of customer 490. Customer 480 presents debit card 485, which is associated with a demand bank account of customer 480. Customer 470 presents system-5-registered driver's license card 215.

Customer 490 completes the purchase of her selected products 493 by transferring products 493 from her cart 492 to station 902, and by presenting card 495. A checkout clerk (not shown) scans each selected product past bar code reader 910, or enters the product selection information manually via keyboard 918. Checkout station 902 determines a total amount due and prints the total amount due on display 917. Customer 490 activates credit button 919. In response to the activation of credit button 919, circuitry in the retailer transmits the account number of card 495 to a credit/debit card authorization provider, such as credit card system 4 shown in FIG. 7, via routing system 120.

In this patent application, the word circuitry encompasses dedicated hardware, and/or programmable hardware, such as a CPU or reconfigurable logic array, in combination with programming data, such as sequentially fetched CPU instructions or programming data for a reconfigurable array.

Customer 480 completes the purchase of her selected products 483 by transferring products 483 from her cart 482 to station 902, and by presenting card 485. The checkout clerk scans selected products past bar code reader 910. Checkout station 902 determines a total amount due and prints the total amount due on display 917. Customer 480 activates debit button 949. In response to the activation of debit button 949, circuitry in payment terminal 922 prompts customer 480 to enter a PIN number into a keypad on terminal 922. Terminal 922 then applies an encryption key to the entered PIN number, to generate an encrypted PIN. Circuitry in the retailer then transmits the encrypted PIN and the account number of card 485 to a credit/debit card authorization provider, such as debit card system 7 shown in FIG. 7, via routing system 120. Debit card system 7 could be operated by the Master Card Corporation.

Customer 470 completes the purchase of her selected products 473 by transferring products 473 from her cart 472 to station 902, and by presenting driver's license card 215. The checkout clerk scans selected products past bar code reader 910. Checkout station 902 determines a total amount due and prints the total amount due on display 917. Station 902 reads the ID information of person 470 from card 215, and reads the Issuer Identification Number, 636010, indicating the State of Florida, from driver's license card 215. (step 25) (FIG. 4B). Customer 470 or the clerk activates debit button 949. In response to the activation of debit button 949, circuitry in payment terminal 922 prompts customer 470 to enter a PIN number into a keypad on terminal 922. Terminal 922 then applies an encryption key to the entered PIN number, to generate an encrypted PIN number. Circuitry in the retailer then transmits the encrypted PIN and the licensee identification of driver's license card 215 to system 5, via routing system 120. At this time the server also transmits retailer ID, store ID date, time, lane ID, cashier ID, transaction amount.

Alternatively, station 902 may be configured so that customer 470 need not activate the credit button 919. In this alternative, station 902 detects the IIN of the card and conditionality applies an encryption key to the entered PIN depending on the detected IIN. In other words, in this example, station 902 word detects the IIN of card 215 and sends the entered PIN without applying the encryption key to the entered PIN.

Circuitry in system 5 uses the ID number of the card, transmitted by the server, to access the associated PIN stored in the database. (step 35). System 5 thus compares the PIN, transmitted by the store server, to the PIN read from the database. (step 40). Depending upon the result of step 40, system 5 conditionally responds to the store server with a card-authorized signal, causing station 902 to allow customer 470 to carry away products 473. (step 45).

Otherwise system 5 sends a card-not-authorized signal to the store server.

Step 40 may also include real-time communication to an external database to validate the card against a negative check database.

It is presently preferred that system 5 validate incoming transactions and respond back to the store within several seconds.

FIG. 5 is a diagram emphasizing other aspects of the exemplary system.

ODFI (Originating Depository Financial Institution) 174 originates an ACH (Automated Clearing House) entry at the request of system 5. ODFI 174 sends the entry to the Federal Reserve ACH system 175, which passes the entry to bank 178, which acts as a Receiving Depository Financial Institution (RDFI), where account 477 is issued debit, provided there are sufficient funds. Thus ODFI 174 effects an Electronic Funds Transfer (EFT).

When system 5 settles a transaction by causing the transfer of funds from account 477 of consumer 470 to account 61 of retailer 6, system 5 makes an entry in accounting system 170, to effectively increment an amount 173 owed by the retailer 6 to the owner of system 5. This amount is a fee for settling the transaction.

FIG. 8 shows retailer 10 in system 1 in more detail. Retailer 10 includes a gas station. Computer system 131 is in the gas station. The gas station includes gas pump point of scale (POS) terminal 132 with card interface 133, gas pump POS terminal 134 with card interface 135, telecommunications circuitry, and a network cable coupling POS terminal 132, POS terminal 134 and telecommunications circuitry together.

Customer 470 buys gas by presenting card 215, either at the payment terminal 132 or elsewhere in the gas station. The gas station reads the ID information from card 215.

Circuitry in system 5 uses the ID number of the card, transmitted by circuitry in retailer 10, to access the associated PIN stored in the database. System 5 conditionally responds to the server in retailer 10 with a card-authorized signal, or a card-not-authorized signal. If the server receives a card-authorized signal, the transaction proceeds and the server then transmits a transaction amount to system 5.

Automated Clearing House (ACH) Settlement transmission occurs daily in batch fashion. (step 50). More specifically, system 5 compiles a file at end of day for submission to the ACH services. The required fields that this file contain are: date, time, transaction type, retailer ID, store ID, bank routing #, bank account #, amount of transaction. The specifics and file format is further defined with the ACH processor.

Status from ACH is collected and logged for review.

FIG. 7 shows another aspect of the first exemplary system, including an in-retailer server that is the gateway of communication leading to routing system 120. Routing system 120 includes a data structure 112, accessed by programs in routing system 120. Data structure 112 allows routing system 120 to select the path of a transaction request packet received from a retailer, as a function of a routing field in the packet. The routing field may contain an issuer identification number (IIN). For example, when routing system 120 receives a transaction request packet containing the number 451252 in the routing field, routing system 120 accesses entry 114, to send the packet to credit card system 4, allowing system 4 to authorize a credit card transaction. Credit card system 4 could be operated by the VISA Corporation.

When routing system 120 receives a transaction request packet containing the number 636010 in the routing field, routing system 120 accesses entry 115, to send the packet to system 5. When routing system 120 receives a transaction request packet containing the number 549035 in the routing field, routing system 120 accesses entry 116, to send the packet to debit card system 7, allowing system 7 to authorize a debit card transaction.

FIG. 9 is a representation of a table 7 in a disk-resident database in system 5. Each row in table 7 is an association between a card ID and other data such as an account number associated with the card ID, and a PIN number associated with the account.

The application will have user interface to activate/inactivate/delete and reissue a card. Transaction logging contains detail information for each payment transaction. For example, the detail includes time stamp: store ID: lane ID: cashier ID: card #: payment amount: swiped vs. bar-coded.

In summary, a point-of-sale payment transaction is effected via a State issued motor vehicle driver's license card and a personal identification number (PIN) as a mechanism of payment for a retail store transaction. A State issued motor vehicle driver's license is processed to identify a consumer and initiate payment at the Point of Sale, without the use of any other form of payment.

The POS allows the driver's license to be used as a form of payment to debit a consumer checking account or savings account as a electronic fund transfer using the Federal Reserve Automatic Clearing House or EPN for settlement.

The system utilizes the driver's license card; a PIN number or Biometric Signature for authentication; POS/payment terminal equipment; a communications network to link to retailers POS system to a ACH host processor; a data base with registered consumers banking information; the ACH system for settlement. The system can be used at any retail facility that installs the system. These include supermarkets, convenience stores, gas stations, general merchants, restaurants etc.

The system allows the consumer to be enrolled into this system either at a merchant location via an operated by store personnel enrollment software program, a self-service kiosk or via the web.

The consumer enrollment process captures information identifying the consumer, to form an electronic record that is stored in a remote or local computer. Once the enrollment is complete, the consumer can use the driver's license to pay for goods and services at any merchant point of sale location using the process and technology of this system.

System 1 provides a process mechanism (Enrollment) for linking, the consumer driver's license card, based on national standard, magnetic and 2 d format to be scanned or swipe, capturing the content of the magnetic data or the decoded barcode data, using a parsing algorithm that presents the data necessary to build the electronic record required by this system. This includes the driver's license number, date of birth, age, address, state issued, date driver's license is issued, date driver's license expires, gender.

Once the driver's license card information is captured, the consumer is asked to enter a PIN. The PIN is encrypted and made part of the electronic record. Next the consumer is asked to present a blank commercial bank check, this check is scanned by check reader that will capture the image of the check, the bank routing number and the bank account. Once the above process is completed the electronic record is formed and stored in a local or remote computer depending on the merchant network infrastructure.

EXAMPLE 2

FIG. 10 shows exemplary system 1′ according to a second preferred embodiment of the present invention. System 1′ includes routing system 120′ circuitry in retailer 6′ that is the gateway of communication leading to routing system 120′. Translator circuitry 137 detects certain Issuer Identification Numbers from cards used by consumers in retailer 6′ and, responsive to such detection, translates to or substitutes a different number. For example, each of entries 139, 140, 141 contains an IIN to be detected on the left half of the entry, and contains a corresponding number to be substituted on the right half of the entry. Software executing in translator 137 examines the left half of the entries. Thus, when a POS in retailer 6′ reads a number driver's license card 636010, indicating the jurisdiction of Florida, translator 137 substitutes the 636010 with 987654.

Routing system 120′ includes a data structure 112′, accessed by programs in routing system 120. Data structure 112′ allows routing system 120′ to select the path of a transaction request packet received from a retailer, as a function of a routing field in the packet. The routing field may contain an issuer identification number (IIN). For example, when routing system 120′ receives a transaction request packet containing the number 451252 in the routing field, routing system 120′ accesses entry 114, to send the packet to credit card system 4, allowing system 4 to authorize a credit card transaction. When routing system 120 receives a transaction request packet containing the number 987654 in the routing field, routing system 120′ accesses entry 115′, to send the packet to system 5. When routing system 120′ receives a transaction request packet containing the number 549035 in the routing field, routing system 120′ accesses entry 116, to send the packet to system 7, allowing system 7 to authorize a debit card transaction.

Throughout this patent application, certain processing may be depicted in serial, parallel, multiplexed, or other fashion, for ease of description. Actual hardware and software realizations, however, may be varied depending on desired optimizations apparent to one of ordinary skill in the art.

EXAMPLE 3

System 5″, according to a third exemplary system can establish various method of communication with the financial processor, including 1) frame relay connection to the financial processor to support the ISO 8583 host to host communication interface as per the specs outlines in this document; 2) an SSL session via the internet that supports the ISO 8583 format; and an https communication via the internet. This method provides a faster implementation, which avoids the set-up of a network infrastructure.

In order to enroll in the program, a consumer is prompted for a driver's license number, a PIN entry, a bank routing, and a demand bank account number, which then becomes part of transmitted packet via a secure SSL connection to System 5″.

The transaction at the POS is effected using some of the circuitry used to effect a debit card transaction. The transaction is tendered as debit payment, the driver's license is swiped at the payment terminal and a prompt for PIN is generated. The pin is encrypted with the current processor PIN algorithm and flows from the store to the Financial Processor encrypted in similar fashion as for bank debit cards.

Pin encryption will follow the current standard use by the payment processor used by the retailers. Once the transaction signal reaches the processor, the processor will decrypt the pin and re-encrypt using a System 5″ key. The transaction is then sent to System 5″ for processing.

Message Header

Regardless of message format all incoming and outgoing message to System 5″ switch should have the following message format.

TABLE 1 Field Name Length Description ID 2 Value should always be “NP” Length 4 Length of message not including header length in network format ISO 8583 Format

Introduction

ISO 8583 specifies a common interface by which financial transaction may be interchanged between financial systems. It specifies messages structure, format and content, data elements and value of data element.

Message Structure

Each message identified in the ISO is constructed in the following sequence: message header, message type identifier, one or more bitmaps and a series of data elements in order of the bitmap representation.

1. Message Type Identifier

A four digit numeric field describing each message class and function. Every message shall start with a message identifier. Only the message identifier related to this design will be described in this document. Refer to ISO 8583 document for a complete list of all identifiers.

TABLE 2 Message Type Description Originating System 0200 Authorization Request Acquirer 0210 Authorization Response Card Issuer 0100 Pre-Authorization Request Acquirer 0110 Pre-Authorization Response Card Issuer 0220 Completion Request Acquirer 0230 Completion Response Card Issuer

2. Bitmaps

The second component of each ISO 8583 message is the bitmap of the particular message. Each message may be composed of one or two bitmaps (If large amount of data needs to be transferred).

The primary bitmap (64 bits) is present in every message. The secondary bitmap is only present if one or more elements with the bitmap number in the ranges of 65-128 are present in the message. Bit 1 in the primary bitmap indicates the presence (1) or absence (0) of the secondary bitmap. In general, frequently used data elements are assigned bitmap number in the range of 1-64.

3. Data Element Format and Attributes

This section describes the format and attributes of data elements.

-   -   a. Attribute Type Definition

The following table describes the different attribute type describing data elements.

TABLE 3 Attribute Description ‘a’ Alphabetic character ‘b’ Bitmap ‘n’ Numeric ‘p’ Pad character, space ‘s’ Special character ‘an’ Alphanumeric ‘as’ Alphabetic and special character ‘ns’ Numeric and Special character ‘anp’ Alphabetic, numeric and pad character ‘ans’ Alphanumeric and special character ‘z’ Track 2 data

-   -   b. Attribute Length

The following table describes units used to indicate the size of the elements.

TABLE 4 Type Unit ‘b’ Bit ‘n’ Numeric digit ‘z’ Track 2 digit

-   -   c. Format Definition

Data elements defined with an entry in the format columns are expressed in a following format.

TABLE 5 Type Description LL Unit length of variable data which follows (00-99) LLL Unit length of variable data which follows (000-999) MM Month (01-12) DD Day (01-31) YY Year (00-99) hh Hour (00-23) mm Minute (00-59) ss Second (00-59) 4. System 5″ Supported Data Elements

TABLE 6 Bit Data Element Name Format Attribute 2 Card Number LLVAR n . . . 19 4 Dollar Amount n12 11 POS transaction number n6 12 Time of Transmission hhmmss n6 13 Date of Transaction MMDDYY n6 33 Merchant Code LLVAR n . . . 11 32 Store # LLVAR n.11 38 Authorization Code an8 39 Approval Code n . . . 3 41 POS lane # ans8 42 Cashier ID ans15 57 Authorization Life Cycle LLLVAR n3 Length must be 3 position 1 = unit type, 0 = no time period, 1 = days, 2 = hours, 3 = minutes position 2 and 3 set to value of period 58 User defined field1 LLLVAR ans . . . 100 59 User defined field2 LLLVAR ans . . . 100 60 PIN LLVAR an16 5. System 5″ Supported Response Codes

TABLE 7 Approval Code Description 00 Transaction submitted Successfully 12 Invalid Date or time 13 Invalid or missing amount. 14 Invalid or missing account number. 32 Invalid or missing Merchant Code 55 Invalid data in PIN Number field 76 Invalid data in User Defined Field 1 77 Invalid data in User Defined Field 2 78 Cardholder Account On Hold 79 Cardholder Account Over Velocity Limits 80 Cardholder Account Blocked 91 Issuer or switch is inoperative 94 Duplicate transaction- The transaction was accepted previously

ISO 8583 Messages

1. Authorization Request

The authorization request message may contain the following data elements. The presence of each element will be reflected in the associated bitmap.

TABLE 8 Bit Element Name Message Type (0200) Primary Bitmap 2 Card Number 4 Dollar Amount 11 POS transaction number 12 Time of Transmission 13 Date of Transaction 32 Store # 33 Merchant Code 41 POS lane # 42 Cashier ID 58 User defined field1 59 User defined field2 60 PIN 2. Authorization Response

The authorization response message may contain the following data elements. The presence of each element will be reflected in the associated bitmap.

TABLE 9 Bit Element Name Message Type (0210) Primary Bitmap 2 Card Number 4 Dollar Amount 11 POS transaction number 12 Time of Transmission 13 Date of Transaction 32 Store # 33 Merchant Code 38 Authorization Code 39 Approval Code 41 POS lane # 42 Cashier ID 58 User defined field1 59 User defined field2 3. Pre-Authorization Request

The pre-authorization request message may contain the following data elements. The presence of each element will be reflected in the associated bitmap.

TABLE 10 Bit Element Name Message Type (0100) Primary Bitmap 2 Card Number 4 Dollar Amount 11 POS transaction number 12 Time of Transmission 13 Date of Transaction 32 Store # 33 Merchant Code 41 POS lane # 42 Cashier ID 57 Authorization Life Cycle 58 User defined field1 59 User defined field2 60 PIN 4. Pre-Authorization Response

The pre-authorization response message may contain the following data elements. The presence of each element will be reflected in the associated bitmap.

TABLE 11 Bit Element Name Message Type (0110) Primary Bitmap 2 Card Number 4 Dollar Amount 11 POS transaction number 12 Time of Transmission 13 Date of Transaction 32 Store # 33 Merchant Code 38 Authorization Code 39 Approval Code 41 POS lane # 42 Cashier ID 58 User defined field1 59 User defined field2 5. Completion Request

The pre-authorization completion request message may contain the following data elements. The presence of each element will be reflected in the associated bitmap.

TABLE 12 Bit Element Name Message Type (0220) Primary Bitmap 2 Card Number 4 Dollar Amount 11 POS transaction number (from 0100 message) 12 Time of Transmission (From 0100 message) 13 Date of Transaction (From 0100 message) 32 Store # 33 Merchant Code 38 Authorization Code (From 0110 message) 39 Approval Code (From 0110 message) 41 POS lane # 42 Cashier ID 58 User defined field1 59 User defined field2 60 PIN 6. Completion Response

The pre-authorization completion response message may contain the following data elements. The presence of each element will be reflected in the associated bitmap.

TABLE 13 Bit Element Name Message Type (0210) Primary Bitmap 2 Card Number 4 Dollar Amount 11 POS transaction number 12 Time of Transmission 13 Date of Transaction 32 Store # 33 Merchant Code 38 Authorization Code 39 Approval Code 41 POS lane # 42 Cashier ID 58 User defined field1 59 User defined field2 Other systems and options for enrollment and transaction processes may be found in U.S. Application Ser. No. 60/724,806 of JOSEPH R. RANDAZZA AND DANILO PORTAL FOR filed Oct. 11, 2005 for PAYMENT SYSTEMS AND METHODS, the contents of which are herein incorporated by reference.

EXAMPLE 4

FIG. 11 shows exemplary system 1′″ including system 5′″ according to a fourth exemplary embodiment of the present invention. System 5′″ has all the circuitry for effecting the functionality of system 5 in the first preferred embodiment. System 5′ has circuitry to perform additional processing, including a retailer-specific velocity check as described below. Velocity thresholds may vary with the retailer or type of industry. For example, the threshold for grocery stores may be different from the threshold for gas stations.

FIG. 12 is a representation of a data structure 181 in system 1′. Data structure 181 is in a disk-resident database in system 5′″. Each row in data structure 181 represents an association between a card ID and a set of velocity thresholds. Each threshold corresponds to a retailer set. A retailer set may contain one or more retailers.

In this example, the first column after card ID is a velocity threshold for a grocery retailer set, the second column is a velocity threshold for a gas station retailer set, and the third column is a velocity threshold for another set of retailers.

A retailer may be alone in its own set.

A retailer may belong to more than one set.

Thus, system 1′″ may have a threshold specific to a particular retailer. The system may also have a threshold specific to a market sector, encompassing multiple retailers. For examples, the system may have a threshold that is compared to the sum of gasoline purchases occurring in the Texaco™, Sonoco™, and other gasoline stations.

FIG. 13 shows data structure 183 representing the sets corresponding to the columns of FIG. 12. Each row in data structure 183 represents a retailer set. Each retailer set includes one or more retailers.

FIG. 14 shows data structure 185 storing a transaction history for each card ID. Each row of data structure 185 represents a transaction.

For example, customer 470 buys gas by presenting card 215, either at the payment terminal 132 or elsewhere in the gas station. The gas station circuitry reads the ID information from card 215. A server in retailer 6 recognizes the identification number of card 215 to be that of a system-5′″-registered card and, in response to this recognition, sends the identification number of card 215 to system 5′″.

Circuitry in system 5′″ uses the ID number of the card to select a row in data structure 181. Circuitry in system 5′ uses the retailer ID to select a row in data structure 183, thereby selecting a retailer set. The selected retailer set thereby determines a column in data structure 181, thereby selecting a velocity threshold for this consumer at this retail site (row 3, column 3 of data structure 181).

System 5′″, for a given transaction date range in data structure 185, adds the transaction amounts for the retailer IDs that are present in the list of the row selected data structure 183. System 5′″ conditionally responds to the server in retailer 6 with a card-authorized signal, or a card-not-authorized signal, depending upon whether the sum is above the velocity threshold for this consumer at this retail site.

If the server receives a card-authorized signal, the transaction proceeds and the server then transmits a transaction amount to system 5′″. Circuitry in system 5′″ then adds a row, to data structure 185, to record the transaction that just occurred in retailer 6.

EXAMPLE 5

FIG. 15 shows exemplary system 5″″ according to a fifth exemplary embodiment of the present invention. System 5″″ has all the circuitry for effecting the functionality of system 5 in the first preferred embodiment. System 5″″ has circuitry to perform additional processing, including selecting from multiple accounts associated with a common card as described below.

FIG. 16 is a representation of a data structure 187 in system 5″″. Data structure 187 is a disk resident database in system 5″″. Each row in data structure 187 is an association between a card ID and one or more account numbers associated with the card ID, and a respective PIN number associated with each account.

System 5″″ has circuitry to select the account depending upon the PIN entered at the POS.

In an enrollment process, circuitry receives personal ID information from a driver license; and receives information corresponding to multiple accounts, each account corresponding to a respective first number (account number) previously displayed to a user, on a bank statement for example. System 5″″ stores a link between the ID information and the account information.

To effect the transaction at retailer 6, system 5″″ receives the ID information from the driver license, and receives a PIN from the holder of the license. System 5″″ uses the received ID information to debit a selected one of the accounts, the account being selected by the second number (PIN).

The account number has more digits than the PIN. The account number presented to the user on a paper statement, and the PIN is selected by the user. The account number has a first number of digits, and the PIN has a second number of digits less than the first number of digits. The first number of digits is at least 12, and the second number of digits is at least 4.

EXAMPLE 6

In this inventive example, Examples 1-5 generally are repeated, except for use of a mobile phone that comprises shopper-side payment token 1700.

At the retail site, the equipment accommodates that the shopper 1701's mobile phone is the shopper-side payment token 1700.

Pre-shopping enrollment takes into account that shopper 1701 will be using a mobile phone as shopper-side payment token 1700. When shopper 1701 who has a US checking account is being enrolled to use his mobile phone to pay at retail sites, information is received from shopper 1701 by which his US checking account number is associated with the telephone number of his mobile phone, with such data for shopper 1701 being stored in a database.

After so enrolling, shopper 1701 takes his mobile phone comprising shopper-side payment token 1700 to the retail site, and uses his mobile phone to accomplish funds settlement via a financial institution to send an ACH entry to the Federal Reserve ACH system or the EPN system, resulting in an account being issued a debit and a related transfer of funds to the owner of the retail site.

EXAMPLE 7

In this inventive example, shopper-side payment token 1700 is a series of characters such as a number (preferably a 7-digit number) enter-able by a shopper into a POS device, such as by being typed by the shopper into a PIN pad 1800 (FIG. 18) at a retail site.

EXAMPLE 7A

Before going out on a first shopping excursion at a retail site, shopper S1 preregisters the shopper's own phone P1 with a mobile app server 1801.

Mobile app server 1801 likewise receives preregistration by other shoppers, such as shopper S2 preregistering that shopper's own phone P2 with mobile app server 1801, on through shopper Sn preregistering that shopper's own phone Pn with mobile app server 1801. The number ‘n’ of shoppers preregistered with mobile app server 1801 can be any whole number, including but not necessarily limited to larger numbers such as 1 million or more.

Mobile app server 1801 is connected to database 1802 where, for each registered shopper S1 . . . Sn, a set of data is stored.

After shopper S1 has registered his phone P1 with mobile app server 1801, he is ready to shop at a retail site comprising POS 1803 that via financial switch 1804 connects to database 1802. In this Example, POS 1803 is manned by CASHIER who maintains under her control during her shift a merchant-side swipe card which is a Mobile Enabler Card (MEC).

Shopper S1 makes a communication to CASHIER so that she becomes aware that she needs to swipe the MEC at POS 1803 so that pin PAD 1800 upon receiving a number entered by shopper S1 will process the number through financial switch 1804 rather than according to another switch. After CASHIER has swiped her MEC at POS 1803, then shopper S1 enters into PIN pad 1800 a number (such as number 4216908 in FIG. 20) that was displayed on his phone P1 in response to his real-time communication with mobile app server 1801. See Example 7B for an example of shopper S1 obtaining the number to enter into the pin pad 1800.

Referring to FIG. 18, a plurality of shoppers ‘n’ each carrying his/her own phones P1 . . . Pn shops at the retail location where POS 1803 is manned or attended by CASHIER. CASHIER refers to a cashier or other personnel working for the merchant. Merchant-side card MEC is maintained under control of CASHIER.

Advantageously a single MEC can be used to process a large number of shoppers Sn.

EXAMPLE 7B

A shopper S1 sees a screen (FIG. 19) on his phone Pn and selects “Pay In Store”, and sees a screen (FIG. 21) on his phone Pn and selects “Mobile Pay”, after which he sees a “Mobile Pay Sign In” screen (FIG. 22) that prompts him to enter (1) his email and (2) his Pin Number that he obtained when he preregistered.

After shopper S1 has entered his email and his Pin Number that he obtained when he preregistered, his phone P1 communicates with mobile app server 1801 which returns to him a screen (FIG. 20) on his phone P1 that tells him, “Please enter the code below on the pin pad when prompted 4216908”.

Preferably the number which is the shopper-side payment token is a temporary payment token, such as a number that is useable by the shopper only during a finite time period, a number that is useable by the shopper only once.

After the number which is the shopper-side payment token has been received into the pin pad 1800 and CASHIER has swiped her MEC, POS 1803 creates a pseudo card number based on the number received via the pin pad, and then based on the pseudo card number performs a normal transaction via financial switch 1804 and in turn database 1802 is accessed to match the pseudo card number with shopper S1 to whom the mobile app server 1801 gave the number that became the pseudo card number.

Shortly after its issuance, the number 4216908 expires as a temporary payment token for shopper S1. If shopper S1 wants to shop further, such as at another retail site (not shown in FIG. 18), shopper S1 recontacts mobile app server 1801 and a different number is issued to him as a temporary payment token.

EXAMPLE 7C Token Management

In this example, the shopper-side payment token is a numeric value up to 7 digits that associates a consumer account (such as an account of shopper S1) with a payment token. Tokens are associated with geographic data so that the token is only valid at a specific store location. Tokens have the following states: Available, Live, Pending Transaction, Expired, and Not Allowed. Available tokens are ready for use. Tokans are associated with a consumer account and having differing lifetimes depending on their token state. Pending Transaction tokens change from Live to Pending Transaction state on first occurrence of a preAuthorization message. Expired tokens have exceeded token lifetime constraints and eventually will be returned to the available token pool. Not Allowed tokens are reserved values not to be used for tokens.

EXAMPLE 7D Token Creation

Pre-authorization is performed by shopper Sn providing email, PIN, Merchant code, and Store number to host. First the email is looked up, then login failure count is checked, then PIN is checked, then enrolled merchant is validated by user's merchant code, then card status Active is verified, then bank account status Active is verified, and finally most recent enrolled card that marches PIN is returned.

The host creates a unique 7 digit token with value between 1 and 9,999,999 and a random number is generated. The following token values are not allowed: 0, 1111111, 2222222, 33333333, 44444444, 55555555, 66666666, 7777777, 8888888, 9999999, 1234567 and 7654321. Up to 50 attempts are made to generate a unique token value before an error is returned. The initial token is created with a Live token status.

The host associates the token with the location data by recording the token with the Merchant code and Store number. The token will only be valid for POS transactions coming from the specific store.

EXAMPLE 7D Token Lifetime

The live token state is created for a consumer account at the time the client application logs in with email/PIN. The token gets converted to a 16 digit pseudo card number in the following format: ‘9-digit number that is a constant known to the financial switch operator’+‘7 digit token’+‘check digit’.

On the first occurrence of a preAuth (0100) message, the token status is changed from Live to PendingTrans state. This prevents multiple users from using the same token for a preAuth. On a successful completion message (0220 or 0200), the token is changed from either Live or PendingTrans state back to the Available state.

EXAMPLE 7E Token Expiration

Token expiration is controlled by values in Table 14 below.

TABLE 14 Token Lifetime Measurements Value Description LiveTokenPreAuth  5 minutes Maximum lifetime between token creation and preAuth (0100) message. Token set to expired state. LiveTokenInStoreCompletion 30 minutes Maximum lifetime between token creation and inside sales completion message (0200). Token set to expired state. LiveTokenPumpCompletion 24 hours Maximum lifetime between token creation and outside sales (pump) completion message (0220). Token set to expired state. Expired  1 hour Maximum lifetime for expired token. Token set to available state.

If the token Live state lifetime exceeds 5 minutes at the time of the preAuth message, the preAuth message fails. If the token PendingTrans state lifetime exceeds 24 hours at the time fo the outside sales completion message (0220), the completion message fails. If the token Live state lifetime exceeds 30 minutes at the time of the inside sales completion message (0200), the inside sales message fails. If the token lifetime exceeds any of the measured checks the token is placed into the expired state.

If the user does not perform any POS transaction and no message is sent to switch 1804, then a database 1802 schedule job expires the token. The scheduled job runs every 10 minutes. It will expire tokens that are over the LiveTokenInStoreCompletion lifetime limit of 30 minutes. Maximum time a token can remain in the Live state is 40 minutes. Maximum time a token can remain in the PendingTrans state is 24.5 hours.

Expired tokens are set back to the available state by a database 1802 scheduled job that runs 30 minutes. Tokens that have been expired for a minimum of 1 hour are set back to Available state.

EXAMPLE 7E Payment Settlement

In order for shopper Sn to be able to receive a temporary payment token from mobile app server 1801, the mobile app server 1801 and/or database 1802 must consider that there will be have a valid mode of payment settlement for that shopper Sn. One example of settling a shopper's transactions when Examples 7-7D are in usage is for a shopper to have preregistered his checking account, and for a payment transaction to be settled via the Federal Reserve ACH system or the Electronic Payment Network (EPN) system.

EXAMPLE 7F Payment Settlement

Another example of settling a shopper's transactions when Examples 7-7D are in usage, is for a payment transaction to be settled otherwise than by using the Federal Reserve ACH system or the Electronic Payment Network (EPN) system. For example, a shopper (such as shopper S2 in FIG. 18) preregisters something other than the shopper's checking account, such as, e.g., a credit card, a Paypal account, etc.

EXAMPLE 7G

Conventional POS hardware and pin pad hardware is used as POS 1803 and pin pad 1800 to practice Examples 7-7D. Shoppers S1 . . . Sn shop using respective 7-digit numbers that they read on their phone screens and enter into pin pad 1800. Meanwhile, other shoppers in line (not shown in FIG. 18) use the pin pad in a conventional way NOT involving their phones, such as to pay using their conventional ATM cards.

In this Example, mobile payment integrates into an existing retail POS system. An existing payment gateway is used by a merchant to ALSO provide a mobile payment option for customers. Advantageously, a merchant uses an existing payment gateway to offer mobile payment for the consumer, without the need for the consumer to swipe a card, with consumers only needing a mobile device to get an authorization token that is the shopper-side payment token. The authorization token has a lifetime and it is random generated, which offers a much higher level of protection for the consumer account, which is stored at the host, compared to conventional practices.

EXAMPLE 7H Merchant-Side Card

In this Example, mobile payment is performed using a web service that has an open architecture supporting multiple message calls (such as mPay operated by National Payment Card).

The function of a mobile payment is identified to the POS by initiating a process by the cashier with the use of a plastic Mobile Enabler Card (MEC) that is available to the cashier only to service mobile payment users.

The MEC is assigned to the retailer and only used by the cashier when a consumer identifies his/her wishes to pay via mobile. The MEC has a unique card number encoded for the retailer, known by the payment processor and interpreted by the POS just like a standard payment card which prompts the consumer for a PIN or User ID, similar to after a debit card has been swiped.

The PIN prompt is then an indication to the consumer to enter a token number, which is an Authorization to Buy, requested from mobile app server 1801.

The consumer enters his email and 4-digit PIN on his mobile device into the app in order to be authenticated and receive back the 7-digit token from the mobile app server 1801.

The token range consists of 10 million values. The token is only valid until the consumer shops or a maximum of 30 minutes. For extra security for closed loop systems, the token is also only valid at the store with the same geographic location of where the user requested the token.

The token is hand entered into the PIN prompt on the payment terminal at a check-out lane. The POS routes the MEC card number and the 7-digit token from the POS through the network to the payment processor's services, where the MEC and the Token become a cross reference to the consumer account owned by the email and PIN originally entered in the mobile device.

EXAMPLE 7I

An MEC as discussed in the above examples is used within a closed loop POS system environment or an Open loop environment through a debit network such as Pulse.

EXAMPLE 7J

For networks or systems that restrict PINs to be 4 digits, a version of the token is provided, where the first 3 digits of the token are assigned for a merchant and the rest of the 4 digits are randomly created.

EXAMPLE 7K mPay

An example of a user experience and transaction sequence is as follows:

1. Consumer goes to the store which is a physical place, and shops.

2. Consumer is now ready to pay for goods purchased.

3. Consumer opens retail branded application.

4. Application requires email and PIN for authentication against the mPay services. This authentication checks that the email and PIN are registered in the host database. The consumer must have previously enrolled in the retail branded site in order for the authentication to work.

5. Once the required data from step 4 is received by the mPay services, a random 7-digit token is generated.

6. The token has a limited amount of time to be valid.

7. The token appears on the screen of the consumer mobile phone.

8. The customer presents the goods to the cashier.

9. The cashier scans the items.

10. The transaction is now ready to be tendered for payment.

11. The consumer tells the cashier that he will be paying using “Retailer Mobile Payment”.

12. No keys are required by the consumer to be pressed at this point.

13. The cashier selects method of payment by swiping the MEC card which is a merchant-side swipe card not operated or taken home by the consumer.

14. The payment terminal prompts the consumer for PIN.

15. Cashier instructs the consumer to Enter token or Authorization Number on the payment terminal.

16. The consumer enters the 7-digit token seen on the phone as the response to the PIN prompt and presses Enter.

17. The POS routes the MEC card number the 7-digit token to the host for authorization.

18. The host determines that the message received by MEC and token is a mobile based transaction.

19. The host cross references the Token to the user authorized in step 5 and posts the transaction against the real account number stored in the host database.

Some advantages include, by way of non-limiting example: the transaction appears to the POS as a standard debit transaction; the existing POS system is used without modifications; an existing payment gateway is used, not requiring change to the retailer's infrastructure; the transaction is highly secured with unique tokenization.

Additional advantages and modifications will readily occur to those skilled in the art. The invention in its broader aspects is therefore not limited to the specific details, representative apparatus, and illustrative examples shown and described. Accordingly, departures may be made from such details without departing from the spirit or the scope of Applicants' general inventive concept. 

What we claim as our invention is:
 1. A payment system, comprising: a consumer-side mobile device; a pin pad; a point-of-sale (POS) device connected to the pin pad; a processor that performs a step of receiving incoming data from a consumer mobile device that is an email address and a PIN entered by the consumer; a temporary token generator that performs a step of generating a temporary token consisting of characters each of which is a button on the pin pad; a mobile application server that performs a step of transmitting the temporary token to the consumer-side mobile device.
 2. The payment system of claim 1, wherein the consumer-side mobile device at no time is connected to, or in electronic communication with, the POS device.
 3. The payment system of claim 1, further comprising a plurality of consumer-side mobile devices.
 4. The payment system of claim 1, comprising a plurality of POS devices.
 5. The payment system of claim 1, wherein the temporary token generator performs a step of generating a temporary token after having received the email address and the PIN sent by the consumer mobile device.
 6. The payment system of claim 5, wherein the consumer-side communications system sends the temporary token to a screen of the consumer mobile device to be viewed by the consumer.
 7. The payment system of claim 6, wherein the temporary token is a 7-digit number displayed on-screen of the consumer mobile device.
 8. The payment system of claim 1, wherein the POS device consists of conventional POS hardware.
 9. A payment method, comprising: operating a mobile application server that communicates with at least one consumer mobile device; operating a financial switch that communicates with at least one POS device; receiving, performed by the mobile application server, an email address and a PIN that are received after having been entered into a consumer-side mobile device; providing, performed by the mobile application server, a temporary token that is a multi-digit number displayed on the consumer mobile device; wherein the providing of the temporary token is performed after receiving the email address and the PIN; identifying a customer associated with the multi-digit number at the time of the POS transaction and settling a payment transaction for the identified customer via an ACH system selected from the group consisting of the Federal Reserve ACH system and the Electronic Payment Network (EPN) system.
 10. The payment method of claim 9, wherein the temporary token is a 7-digit number.
 11. The payment method of claim 9, further comprising a step performed by a computer of treating a temporary payment token as expired after a predetermined period of time.
 12. The payment method of claim 9, performed without any physical card having been issued to a consumer.
 13. The payment method of claim 9, performed without the consumer carrying any physical card.
 14. The payment method of claim 9, wherein the POS device is never connected to, or in electronic communication with, the consumer mobile device.
 15. The payment method of claim 14, further comprising changing a token status from a Live state or a Pending Transaction state back to an Available State.
 16. The payment method of claim 9, further comprising changing a token status from a Live state to a Pending Transaction state.
 17. The method of claim 9, practiced wherein the at least one POS device used in the method steps consists of conventional POS hardware.
 18. The method of claim 17, further comprising, the conventional POS hardware receiving the temporary token via a pinpad, wherein a transaction in which the temporary token is entered appears to an existing retail POS system as a standard debit transaction as that of another shopper in line with an ATM card who enters a PIN into the same conventional POS hardware, and wherein when the temporary token has been entered via the pinpad, an existing payment gateway is used, without change to retailer infrastructure.
 19. An authentication method for a payment system, comprising: authenticating, performed by a computer, based on (1) an email address received by the computer from a consumer mobile device; (2) a PIN received, by the computer, from the consumer mobile device; and (3) a token received from a POS device into which the token was entered.
 20. The authentication method of claim 19, comprising processing the received email address against a database of email addresses of registered consumer users and/or processing the received PIN against a database of PINs issued to registered consumer users.
 21. The authentication method of claim 19, wherein the consumer mobile device is never connected to, or in communication with, the POS device.
 22. The method of claim 19, practiced wherein the POS device used in the method step consists of conventional POS hardware. 